Scoping Plan Kick-Off Workshop Scoping Plan Workshop Series - - PowerPoint PPT Presentation

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AB 32: The California Global Warming Solutions Act of 2006 AB 32: The California AB 32: The California Global Warming Solutions Act of 2006 Global Warming Solutions Act of 2006

Scoping Plan Kick-Off Workshop

Scoping Plan Workshop Series November 30, 2007 California Air Resources Board

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Workshop Overview Workshop Overview Workshop Overview

• Introduction and Opening Remarks
• Background
• Scoping Plan Development
• Elements of the Scoping Plan
• Questions and Comments

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Background Background Background

Email questions to CCPlan@arb.ca.gov

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Background: What Is Global Warming? Background: What Is Global Warming? Background: What Is Global Warming?

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Projected Global Warming Impact on California, 2070-2099

(as compared with 1961-1990)

70-80% loss in Sierra snowpack 14-22 inches of sea level rise 2.5-4 times as many heat wave days

Medium-High Emissions (5.5-8 ° F)

90% loss in Sierra snowpack 22-30 inches of sea level rise 3-4 times as many heat wave days

Business as Usual Emissions (8-10.5 ° F) 4 3 2 8 5 6 7 1 9 10 11 12 13° F

Our Changing Climate: Assessing the Risks to California (2006), www.climatechange.ca.gov

30-60% loss in Sierra snowpack 6-14 inches of sea level rise 2-2.5 times as many heat wave days

Lower Emissions (Governor’s 2050 target) (3-5.5 ° F)

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California GHG Emissions California GHG Emissions California GHG Emissions

CO2, N2O HFCs CO2, CH4, N2O CO2 CO2

ARB, “California 1990 Greenhouse Gas Emissions Level and 2020 Emissions Limit” (2007), www.arb.ca.gov/cc/ccei/inventory/1990_level.htm

CO2 89% SF6 1% Halogenated gases <1% CH4 6%N2O 4%

1990, CO2 eq

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California GHG Emissions California GHG Emissions California GHG Emissions

Agriculture 5% Industrial 24% Commercial 3% Residential 7% Transportation 35% Electricity Generation (Imports) 14% Electricity Generation (In-State) 11% ARB, “California 1990 Greenhouse Gas Emissions Level and 2020 Emissions Limit” (2007), www.arb.ca.gov/cc/ccei/inventory/1990_level.htm

GHG EMISSIONS BY SOURCE

Commercial 3% Residential 6% Electricity Generation (In-State) 12% Agriculture 6% Transportation 38% Industrial 20% Electricity Generation (Imports) 13%

2004 [~480 MMT CO2 eq] 1990 [~427 MMT CO2 eq]

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What Is AB 32? What Is AB 32? What Is AB 32?

• Sets in statute 2020 target
• ARB to monitor/regulate GHG sources
• Air Resources Board lead, but
• Cal/EPA and Climate Action Team continue

coordinating statewide climate policy

• Other agency authorities preserved
• Role of Public Utilities Commission and Energy

Commission explicitly recognized

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Magnitude of the Challenge Magnitude of the Challenge Magnitude of the Challenge

ARB Emissions Inventory 100 200 300 400 500 600 700 1990 2000 2004 2020 2050

Year Million Metric Tons (CO2 Equivalent) 1990 Emission Baseline ~173 MMT CO2E Reduction 80% Reduction ~341 MMTCO2E

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AB 32 Timeline AB 32 Timeline AB 32 Timeline

2020 2007 2008 2009 2010 2011 2012

GHG reduction measures enforceable Adopt GHG reduction measures Publish list of early actions Adopt scoping plan Mandatory reporting & 1990 Baseline Adopt enforceable early action regulations Reduce GHG emissions to 1990 levels Identification/ implementation

• f further

emission reduction strategies Early action regulations enforceable

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December Board Hearing December Board Hearing December Board Hearing

• ARB Board will consider:

– ETAAC Member Replacement – Action at the Local Level Update – 1990 Statewide GHG Emissions Level & 2020 Emissions Limit – Mandatory GHG Reporting Requirements

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Scoping Plan Development Scoping Plan Development Scoping Plan Development

Email questions to CCPlan@arb.ca.gov

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Scoping Plan Scoping Plan Scoping Plan

• Describe how California will reduce GHG

emission levels to 1990 levels by 2020

• Provide a vision for a low carbon future - 2020

and 2050

• Establish California’s leadership on addressing

climate change

• Maximize benefits to California

– Criteria and toxic air pollutant co-benefits – Economic development – Community participation

• Prerequisite for regulatory requirements

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How Will the Scoping Plan Be Developed? How Will the Scoping Plan Be Developed? How Will the Scoping Plan Be Developed?

• Identify maximum technologically

feasible and cost-effective measures

• Assess possible mechanisms to achieve

reductions

• Evaluate scenarios to achieve the 2020

limit

• Develop recommendations for the draft

staff report

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Tentative Scoping Plan Development Schedule Tentative Scoping Plan Development Tentative Scoping Plan Development Schedule Schedule

Mechanisms Workshop (Oakland) Jan 16, 2008 Board Hearing - 1990 Baseline, Mandatory Reporting Dec 6 & 7, 2007 Scoping Plan Kick-Off Workshop Nov 30, 2007 Board Hearing - Scoping Plan Nov 20-21, 2008 Final Staff Proposal released Oct 2008 Workshops on draft plan (Statewide) July 2008 Draft Scoping Plan released June 2008 Scoping Plan Scenarios Workshop (Sac) Mar 24, 2008 Sector Summary Workshop (Sac) Dec 14, 2007

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Who Is Developing the Scoping Plan? Who Is Developing the Scoping Plan? Who Is Developing the Scoping Plan?

• ARB staff responsible for the Scoping Plan
• ARB working closely with Cal/EPA and Climate

Action Team Subgroups

• Technical evaluations performed by multi-

agency teams, as necessary

• Stakeholder outreach will be a joint effort with
• ther state agencies
• Advisory groups (EJAC, ETAAC & MAC)

providing recommendations

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Who’s Doing what at ARB? Who Who’ ’s Doing what at ARB? s Doing what at ARB?

• Office of Climate Change

– Policy oversight of AB 32 implementation – Responsible for Scoping Plan development and evaluation of emission reduction mechanisms

• Technical Divisions

– Provide technical expertise to support the Scoping Plan – Responsible for regulatory development and implementation of measures identified in the Scoping Plan

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Climate Action Team Subgroups Climate Action Team Subgroups Climate Action Team Subgroups

• Agriculture
• Energy
• Forests
• Waste Management
• Water/Energy
• Green Buildings
• State Fleet
• Land Use and Local

Government

• Cement
• Economics
• Scenario

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Who Else Is Involved? Who Else Is Involved? Who Else Is Involved?

• Local air districts & other local government
• Agriculture
• Business & industry
• Transportation sources
• Environmental groups
• Community groups
• California Climate Action Registry
• Western Climate Initiative
• International organizations

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Opportunities for Participation Opportunities for Participation Opportunities for Participation

• Scoping Plan Workshop Series
• Stakeholder workgroups
• Individual regulatory proceedings

– Discrete Early Action Measures – Subsequent regulatory actions

• ARB Community Outreach Efforts
• Advisory Committees

– ETAAC – EJAC

• Draft Scoping Plan workshops
• Board Hearing

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Scoping Plan Elements Scoping Plan Elements Scoping Plan Elements

Email questions to CCPlan@arb.ca.gov

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Scoping Plan Elements Scoping Plan Elements Scoping Plan Elements

• Emission inventory
• Evaluation of methods to achieve reductions
• Staff recommendations for measures
• Evaluations
• Implementation
• Getting to 2050
• Next steps
• Technical support documents

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Emission Inventory Emission Inventory Emission Inventory

• AB 32 sets an emission cap for 2020
• Board will consider the 1990 baseline in

December 2007

• Forecast of 2020 “business as usual”

emission is under development

– Will be updated over the next year and finalized in Scoping Plan

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• Which tools are in the mix for evaluation?
• What are the criteria for evaluating

available tools?

• AB 32 context for market mechanisms
• Design options

Evaluation of Methods to Achieve GHG Reductions Evaluation of Methods to Achieve Evaluation of Methods to Achieve GHG Reductions GHG Reductions

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Proposed Criteria for Program Design Proposed Criteria for Program Design Proposed Criteria for Program Design

• Meet all legal requirements

– Comply with AB 32 requirements and goals – Be consistent with other statutes; the Commerce Clause, the Federal Power Act, etc.

• Achieve maximum feasible and cost-effective

reductions that are real, permanent, measurable, verifiable, and enforceable

• Avoid localized and disproportionate impacts on

minority and low-income communities

• Avoid interference with air toxic or criteria

pollutant program requirements

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Proposed Criteria for Program Design Proposed Criteria for Program Design Proposed Criteria for Program Design

• Maximize total benefits to California (e.g. reduce

air pollution, promote energy diversification, advance socio-economic objectives)

• Minimize administrative burdens and transaction

costs

• Be simply designed, easily understood, easy to

administer, and easy to comply with

• Minimize the potential for leakage
• Include as many sources or categories of sources

as practical while encouraging participation beyond included sources

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Proposed Criteria for Program Design Proposed Criteria for Program Design Proposed Criteria for Program Design

• Provide appropriate incentives for early

voluntary reductions

• Stimulate investment and reward innovation
• Inspire other government entities to take action

through our model and by including mechanisms that facilitate linkage

• Be consistent with established international

standards and build upon existing international programs

• Ensure that program costs and benefits are

distributed equitably

• Community empowerment

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Tools to be Evaluated for AB 32 Implementation Tools to be Evaluated for Tools to be Evaluated for AB 32 Implementation AB 32 Implementation

• Many possible approaches

– Direct Regulations – Alternative Compliance Mechanisms – Market-Based Mechanisms

• Cap & trade
• Offsets

– Other Alternative Mechanisms

• Incentives
• Fee-bates
• Voluntary actions
• Carbon tax/fee
• January 16 workshop dedicated to Mechanisms

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Direct Regulations Direct Regulations Direct Regulations

• CAT Subgroups and associated sector teams are

evaluating possible measures that might be basis for command and control regulation

• Sector overviews will be presented at December

14 workshop

– Electricity – Transportation – Business and Industry – Local Initiatives and Land Use – Agriculture – Forestry

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Direct Regulations Direct Regulations Direct Regulations

• ARB adopted regulations

– AB 1493 – Anti-idling regulations

• Discrete Early Actions

– 9 separate measures, ~16 MMTCO2E by 2020

• LCFS, High GWP gases, Landfill Gas Capture
• Smartway, Tire Inflation, SF6 and Green Ports
• California standards

– RPS – Building standards – Other State Agency regulations

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AB 32 and Market Mechanisms AB 32 and Market Mechanisms AB 32 and Market Mechanisms

• AB 32 defines “market-based compliance

mechanism” as either of the following:

– A system of market-based declining annual aggregate emissions limitations for sources or categories of sources that emit greenhouse gases. – Greenhouse gas emissions exchanges, banking, credits, and other transactions, governed by rules and protocols established by the state board, that result in the same greenhouse gas emission reduction, over the same time period, as direct compliance with a greenhouse gas emission limit

• r emission reduction measure adopted by the

state board pursuant to this division.

(H&S Code

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AB 32 and Market Mechanisms AB 32 and Market Mechanisms AB 32 and Market Mechanisms

• Prior to inclusion of market mechanisms, ARB

must:

– Consider the potential for direct, indirect, and cumulative emission impacts, including localized impacts in communities that are already adversely impacted by air pollution. – Design any market-based compliance mechanism to prevent any increase in the emissions of toxic air contaminants or criteria air pollutants. – Maximize additional environmental and economic benefits for California, as appropriate.

(H&S Code

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Possible Approaches for a Cap & Trade System Possible Approaches for a Possible Approaches for a Cap & Trade System Cap & Trade System

• California only cap & trade system

– Electricity only – Electricity and other large sources (e.g. some or all sources covered under mandatory reporting) – Electricity, other large sources, and transportation fuels – Upstream

• Regional (WCI) cap & trade system

– Same sector scope options as above

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Options For the Electricity Sector Options For the Electricity Sector Options For the Electricity Sector

• Options for the electricity sector include:

– Load based cap & trade – First seller cap & trade – Generators included in cap & trade, with imports addressed through load based programs (EE, RPS, etc.) – Not in cap & trade until regional/national system is established; rely on load-based programs for emission reductions from sector

• Recommendations being developed by

CPUC/CEC

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Key Steps in Joint Proceeding Key Steps in Joint Proceeding Key Steps in Joint Proceeding

– February/March: Public Utilities Commission and Energy Commission will provide interim decision with recommendations to ARB on key policy

• ptions for the electricity/natural gas sector

– August/September: The two commissions provide final decision with recommendations on electricity/natural gas sector to ARB

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Design Issues for Cap & Trade System Design Issues for Cap & Trade System Design Issues for Cap & Trade System

• A recommendation to include a cap &

trade system would need to address:

– California/WCI/other – Sectors included – Level of the cap – Point of regulation – Allocation/auction – Offsets – Banking/borrowing – Etc.

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Offsets Offsets Offsets

• Offsets could play a role in a cap &

trade or as alternative compliance for direct regulations

• Issues to address include:

– Validity/enforceability of the offsets – Which sources can be offsets – When can offsets be used – Geographic and/or quantitative limits

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Other Alternative Mechanism Considerations Other Alternative Mechanism Other Alternative Mechanism Considerations Considerations

• Any alternative compliance mechanisms

will need to include:

• Rigorous monitoring and reporting

requirements

• A strong verification and enforcement

program

• Evaluation of options that generate

revenue (e.g. allowance auction or a carbon tax) will need to consider how best to distribute proceeds

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Modeling Modeling Modeling

• Economic modeling work

– ICF doing macroeconomic modeling for ARB – E3 doing electricity sector modeling for PUC and the joint proceeding – Will model different scenarios of program design (e.g. carbon tax scenario; electricity

• nly cap & trade; upstream cap & trade)
• March 24 Scenario Workshop will present

preliminary modeling results

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Staff Recommendations for Measures Staff Recommendations for Measures Staff Recommendations for Measures

• ARB staff will recommend a suite of

emission reduction measures and methods

– Presented by sector, implementation method, and implementing organization

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Evaluations Evaluations Evaluations

• Numerous evaluations required for

Scoping Plan and resulting regulations

• ARB staff will address all required

evaluations in the Scoping Plan

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Required Evaluations Required Evaluations Required Evaluations

• Criteria pollutant and air toxic emission

impacts

• Total economic costs and benefits
• Total non-economic costs and benefits
• CA economy
• CA environment
• Public health
• Small business

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Required Evaluations Required Evaluations Required Evaluations

• Relative contribution/significance of source

types

• De minimis threshold
• Environmental justice
• Overall societal benefits
• Administrative burden
• Leakage
• Activities of other states/nations
• Market-based measures

(H&S Code

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Getting to 2050 Getting to 2050 Getting to 2050

• Scoping Plan must meet 2020 requirement

– Also should address longer-term 2050 goal

• Scoping Plan measures should contribute to

2050 goal

• Some Scoping Plan strategies may have

greater impacts after 2020

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Plan Implementation Plan Implementation Plan Implementation

• Adopt and implement GHG reduction

measures

• Accountability

– State agency annual “Report Card” due to Legislature beginning March 2008

• Enforcement of GHG regulations

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AB 32 Timeline AB 32 Timeline AB 32 Timeline

2020 2007 2008 2009 2010 2011 2012

GHG reduction measures enforceable Adopt GHG reduction measures Publish list of early actions Adopt scoping plan Mandatory reporting & 1990 Baseline Adopt enforceable early action regulations Reduce GHG emissions to 1990 levels Identification/ implementation

• f further

emission reduction strategies Early action regulations enforceable

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After the Scoping Plan - Next Steps After the Scoping Plan After the Scoping Plan -

• Next Steps

Next Steps

• AB 32 requires ARB to update the

Scoping Plan every five years

• CAT Update every two years
• Integration with possible regional and/or

federal greenhouse gas programs

• Continue to evaluate new GHG

technology

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Additional Information and Contacts Additional Information and Additional Information and Contacts Contacts

Email questions to CCPlan@arb.ca.gov

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Additional Information Additional Information Additional Information

• ARB Climate Change Web Site

– http://www.arb.ca.gov/cc/cc.htm – Stay informed - sign up for list serve

• California Climate Change Portal

– http://www.climatechange.ca.gov

• ARB and other agency contacts are available

at: http://www.arb.ca.gov/cc/contacts/contacts.htm

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Questions and Comments? Questions and Comments? Questions and Comments?

Email questions to CCPlan@arb.ca.gov